Namibia already holds a place on the cap table of its own oil. Whether that place becomes ownership in the fullest sense is a decision we still have time to make.
In the closing months of this year, TotalEnergies is expected to decide whether to build the Venus field. If it proceeds, and if the schedule is maintained, Namibia becomes an oil producer by 2029 and seven years after the first well, we are expected to discover what lies beneath the Orange Basin.
More than 11 billion barrels of oil in place have been identified off our coast. The national conversation has settled, understandably, on how much money will come. The better question is what we will own when it does?
Our national oil company holds 10% of the licence containing Venus, 10 and 15% in two neighbouring blocks, and 5% of the Kudu gas field. In a frontier province that has drawn some of the largest energy companies in the world, a Namibian entity sits in every one of those rooms, which is neither nothing nor inevitable.
It is worth being precise about what those stakes are. In frontier exploration a state holding of this kind is usually carried, meaning the other partners fund our share of the cost and recover it later out of our share of the revenue. For a country with no production history and a treasury under strain, that was a sensible instrument. It let us take a position in wells that might have been dry without risking public money we could not afford to lose, and Shell’s decision to write down its own Namibian discoveries is a reminder of how real that risk was.
A carry, though, is not a gift but a deferred obligation, and it shapes when money reaches us and how much say we have while we wait.
Ownership that someone else funded is ownership that pays you last, once the costs of getting there have been recovered. The state still collects royalties and taxes throughout, and those matter enormously.
However, equity that has been paid for and equity that has been carried are different instruments, with different rights, timing and returns.
We already have a Namibian example of the alternative through SDG Namibia One, a blended finance vehicle built for that purpose, backed by a share subscription and development funding rather than by a claim against future output. Arranging that was harder than accepting a carry, and the Environmental Investment Fund deserves credit for doing it, because what Namibia acquired there was a purchase rather than a place setting.
Which brings us to the objection that usually ends this conversation, that Namibia lacks the capital to buy into its own projects.
As I have highlighted in my previous analysis dated 22 July, our retirement funds hold more than N$300 billion, roughly half invested beyond our borders, and that the constraint is not willingness but a shortage of investable local assets. Here, then, are the assets we have been waiting for.
None of this is simple and none of it should be rushed, but three things would help. Fiscal terms ought to be settled before the final investment decision, because they are agreed once and then govern.
The Welwitschia Fund has managed its money well, growing on investment returns alone since its seed capital to roughly N$453 million, and what it needs before the first oil is a rule on what share of petroleum revenue flows into it. Our petroleum legislation, which dates from 1991, is better modernised before production begins.
The windfall is not really a question of whether the money arrives, it is a question of whose balance sheet it lands on.
A country that hosts a resource boom collects wages and taxes for as long as the field produces, while a country that owns one is left with something after the field is gone.
– Jason Kasuto is managing director of Monasa Advisory & Associates, a Namibian transaction advisory firm working across capital markets, research and development finance.
